4.4: Administer Accounts Procedure

Administer accounts receivable procedure

a) use pre-numbered invoices which specify:

• GST registration number.
• customer name and address.
• description and name of products and services.
• price, including taxes and service charges.
• terms of payment.
• discounts for early payment.
• amount of interest charged on late payments.
• method of payment.
• sales person name/identification number.
• date of sale.

b) process invoice immediately following sale.

c) send invoice to customer.

d) record receivables in ledger.

e) update customer file.

 f) send statements to customer.

g) collect payment:

• note day received.
• enter payment into system.
• issue receipt.

h) review outstanding receivables monthly:

• age of accounts, e.g. on 30, 60, 90 and 120 days:
• calculate interest charges.

i) collect outstanding receivables, e.g. use collection agency, file in small claims court. Administer accounts payable procedure

a) set aside time to process accounts payable, e.g. weekly, monthly.

b) determine amounts owed:

• separate VAT from payables.
• compare invoices to purchase orders and statements.

reconcile tax assessments:

• investigate and appeal discrepancies.

c) prioritise payments, e.g. identify discounts and penalties, and pay suppliers first.

d) issue cheques:

• ensure that sufficient funds are in bank account.
• record particulars on cheque stubs or record sheet. e) record cheque numbers and dates paid on invoices and statements. f) mail cheques. g) enter payment into system.